Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 30) Regulations 2005
- Act Code: SFA2001-S475-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (SFA) (notably section 337(1))
- Commencement: 20 July 2005
- Legislative Status: Current version (as at 27 March 2026)
- Key Provisions: Section 2 (definitions); Section 3 (exemption)
- Citation: SL 475/2005
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 30) Regulations 2005 (“Stabilising Action Exemption Regulations”) is a targeted set of subsidiary rules made under the Securities and Futures Act 2001 (“SFA”). In plain terms, it creates a narrow exemption from certain market conduct prohibitions for stabilising activities carried out in relation to a specific bond/notes issuance.
In Singapore’s regulatory framework, market conduct rules are designed to protect investors and maintain fair and orderly markets. Among other things, the SFA contains provisions that restrict or prohibit certain dealing practices that could distort prices or mislead investors. However, in some capital markets transactions—particularly new issues—market stabilisation may be permitted under controlled conditions. Stabilisation can help reduce volatility immediately after issuance, supporting liquidity and price discovery.
This legislation does not broadly legalise stabilisation. Instead, it carves out a specific exemption for stabilising action relating to a defined set of “Notes” issued by a particular issuer, carried out by a particular stabilising party (ABN Amro Bank N.V. or its related corporations), within a defined time window after issuance, and only in relation to specified categories of counterparties.
What Are the Key Provisions?
Section 1 (Citation and commencement) provides the formal name of the Regulations and states that they come into operation on 20 July 2005. This matters for practitioners because the exemption is time-bound and must be applied only to stabilising action that occurs after the Regulations take effect (and, in any event, within the 30-day period specified in section 3).
Section 2 (Definitions) is crucial because the exemption is only as broad as the defined terms. Two key definitions are provided:
- “Notes” are defined very specifically as the 7-year fixed rate notes due July 2012 issued by The Aromatics (Thailand) Public Company Limited, for a principal amount of up to US$300 million.
- “stabilising action” is defined as an action taken in Singapore or elsewhere by ABN Amro Bank N.V. (or any of its related corporations) to buy, or to offer or agree to buy any of the Notes in order to stabilise or maintain the market price of the Notes in Singapore or elsewhere.
From a legal compliance perspective, these definitions mean that the exemption is transaction-specific and counterparty-specific. A different issuer, a different tranche, a different maturity, or stabilising activity by a different institution would not automatically fall within the exemption. Likewise, the stabilising activity must be undertaken by ABN Amro Bank N.V. or its related corporations, and it must be directed toward stabilising or maintaining market price.
Section 3 (Exemption) is the operative provision. It states that sections 197 and 198 of the Act shall not apply to stabilising action taken in respect of any of the Notes, within 30 days from the date of issue, with stabilising action carried out with either:
- (a) a person referred to in section 274 of the SFA; or
- (b) a sophisticated investor as defined in section 275(2) of the SFA.
Although the extract does not reproduce sections 197, 198, 274, and 275(2), the structure is clear: the exemption removes the application of particular market conduct prohibitions (sections 197 and 198) for stabilising action, but only if all conditions are satisfied. The conditions are cumulative:
- Time condition: stabilising action must be taken within 30 days from the date of issue of the Notes.
- Subject-matter condition: the action must be in respect of the defined Notes.
- Actor condition (via definition): stabilising action must be taken by ABN Amro Bank N.V. or its related corporations (as defined in section 2).
- Counterparty condition: the stabilising action must be with a person falling within section 274 or with a sophisticated investor under section 275(2).
For practitioners, the counterparty condition is often the most operationally challenging. It requires careful verification of the status of the counterparty (e.g., whether it is within the section 274 category or qualifies as a sophisticated investor). This typically involves documentation and investor classification processes, and it may require ongoing monitoring if the stabilising programme involves multiple counterparties.
How Is This Legislation Structured?
The Regulations are short and structured as a standard legislative instrument with three substantive parts:
- Section 1: Citation and commencement (when the Regulations take effect).
- Section 2: Definitions (defining “Notes” and “stabilising action”).
- Section 3: Exemption (the legal mechanism that disapplies sections 197 and 198 of the SFA for qualifying stabilising action).
There are no additional schedules or detailed procedural requirements in the extract provided. The compliance analysis therefore turns heavily on the definitions and the exemption conditions in section 3, as well as on the content of the referenced SFA provisions (sections 197, 198, 274, and 275(2)).
Who Does This Legislation Apply To?
The Regulations apply to stabilising action in relation to the defined Notes. In practice, this means they are relevant primarily to the stabilising entity (ABN Amro Bank N.V. and its related corporations) and to the transaction participants who interact with that entity during the stabilisation window.
However, the exemption is also conditioned on the type of counterparty involved. Stabilising action must be taken with a person referred to in section 274 of the SFA or with a sophisticated investor under section 275(2). Consequently, the Regulations indirectly affect issuers, arrangers, and dealing desks because they must ensure that any stabilisation trades are executed within the permitted counterparty universe and within the 30-day period.
Why Is This Legislation Important?
This legislation is important because it demonstrates how Singapore’s market conduct regime balances two competing objectives: (1) preventing market manipulation and unfair dealing, and (2) allowing legitimate stabilisation practices in connection with new issuances. By disapplying specific SFA provisions for a limited stabilisation programme, the Regulations provide legal certainty to market participants who would otherwise face uncertainty about whether stabilising trades could breach general prohibitions.
From a compliance and enforcement perspective, the exemption is narrow and conditional. A practitioner advising on a stabilisation programme must therefore treat the exemption as a checklist exercise: confirm the exact instrument (the defined Notes), confirm the stabiliser (ABN Amro Bank N.V. or related corporations), confirm the timing (within 30 days from issue), and confirm the counterparty category (section 274 persons or sophisticated investors). If any element fails, the exemption would not apply and the underlying prohibitions in sections 197 and 198 could become relevant.
Finally, the Regulations are a useful example of how Singapore uses subsidiary legislation to tailor exemptions to particular transactions. Rather than relying on broad, generic stabilisation permissions, the law can be calibrated to specific issuances and specific market participants. This approach supports investor protection while still enabling market functioning during the critical post-issuance period.
Related Legislation
- Securities and Futures Act 2001 (including sections 197, 198, 274, 275(2), and the regulation-making power in section 337(1))
- Futures Act (as referenced in the legislation metadata)
- Stabilising Act (as referenced in the legislation metadata)
- Timeline (legislation versioning and amendment tracking)
Source Documents
This article provides an overview of the Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 30) Regulations 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.